Keeping Up with Exchange Traded Funds

The Wall Street Journal recently ran a story on how drugstores might benefit from the upcoming swine flu season. We take the question one step further and ask which ETFs might benefit if the H1N1 virus returns this fall.

The Dow Jones newswire story, Drug Stores Poised To Benefit From Potential H1N1 Resurgence, quotes several analysts and money managers as predicting that drugstores such as CVS, Walgreen and Rite Aid may see a lift in traffic, revenue and profits if the Swine Flu becomes more widespread. Industry watchers expect more consumers to buy hand sanitizer, get prescriptions filled and even receive their flu shots at the drug stores.

Several Exchange Traded Funds have a concentrated position (3% or more) in CVS and W

We are not a political organization, but we are pro-investor, pro-markets and pro-ETFs, so we hate to see one regulatory agency do so much damage in such a short period of time. (The commission issued nine press releases last week alone - what happened to August vacations?)

Please help put the brakes on the CFTC by reaching out to your representatives in Washington.

As part of a recent warning to retail investors, the Financial Industry Regulatory Authority (FINRA) and SEC included a list of questions to consider before investing in leveraged or inverse ETFs:

How does the ETF achieve its stated objectives? And what are the risks?
Ask about—and be sure you understand—the techniques the ETF uses to
achieve its goals. For example, engaging in short sales and using
swaps, futures contracts, and other derivatives can expose the ETF—and
by extension ETF investors—to a host of risks.

The fact that active mutual fund managers regularly underperform their benchmarks when it come to equities is well known. Now, evidence points to the same poor performance on the part of active bond managers.

The Wall Street Journal'sTom Lauricella reports that the average intermediate bond fund lost 4.7% in 2008 compared to the benchmark Barclays Capital Aggregate Index which was up 5.2% in the same period.

Turns out that the active managers were betting on low quality bonds as the credit crisis continued to unfold. In June 2008, the average intermediate fund held 62% of its assets in triple-A rated securities and over 5% in junk bonds compared to 76% in triple-A and

The Obama ETF Portfolio

ETF Investing Alongside the New Administration

With Chrysler in bankruptcy and General Motors trading under $2 per share, the Obama administration ordered stricter fuel goals that will require the ailing industry to invest $47 billion that it doesn't have.

The new rules require auto makers to increase the fuel economy of automobiles sold in the
U.S.

The Obama ETF Portfolio

ETF Investing Alongside the New Administration

Medicare changes announced by the Obama administration caused a significant decline in health care stocks.

The new approach calls for elimination of private sector participation in medicare plans, effectively eliminating $175 million of revenue for the industry. Plan management will move to government bureaucrats who can administer "more efficiently".

Amid a slowing global economy and an uncertain outlook for the future, investors have piled into the dollar as a safe haven investment.

Year-to-date, the dollar is up relative to almost every world currency including up 10% against the Euro and up 4% against the Yen.

The strength against the Euro continues a trend from 2008 as the global recession has hit Europe hard and uncertainty about economies in Eastern Europe threaten to weaken the Euro further.

The Yen strengthened against the dollar in 2008 when it looked as if Japan would bypass the problems in the U.S. economy. The unwinding of carry-trade positions also contributed to the Yen's strength. Since then, the Yen has weakend against the dollar as the U.S.

After 6 straight quarters of declining earnings for the S&P 500, a downturn of 3 years in length is a real possibility. To find another large downturn that lasted for that long, go all the way back to the 1930s.

Currently in 3rd place in terms of Latin American oil production, Brazil promises to soon overtake regional leaders Mexico and Venezuela.

According to the Wall Street Journal, Goldman Sachs and the International Energy Agency, Brazil's state-run energy company PetroBras has recently increased capital investment plans with a goal becoming one of the world's five largest oil producers.

Mexico continues to lead Latin American in oil production but output is declining at a rate of 7 to 8% a year as the country's main oilfield becomes less productive.

Venezula's production is suffering from insufficient investment, billions of dollars of unpaid bills to suppliers and mandated cuts as a member of OPEC.

Sweden recently rolled back a longstanding ban on nuclear power as concerns over climate change and energy security are causing European countries to rethink their nuclear power policies.

According to the Wall Street Journal, Slovakia and Bulgaria recently sought EU permission to restart old reactors of Soviet design after a dispute between Russia and Ukraine brought supplies of natural gas to Eastern Europe to a halt. Italy, Poland and the U.K.